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    Triangle Exchange Opportunity- Foreign Currency Exchange

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    Bid Ask
    ZAR/£ 14.2 14.52
    ZAR/$ 10.38 10.56
    $/£ 1.33 1.34

    Consider the above exchange rates:

    a) Do the above exchange rates present an arbitrage opportunity? Explain?

    b) Calculate the arbitrage profit assuming an initial investment amount of ZAR 1 million?

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    https://brainmass.com/economics/exchange-rates/triangle-exchange-opportunity-foreign-currency-exchange-437303

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    Bid price= lowest price a buyer is willing to pay for an asset
    Ask= highest price a seller is willing to sell an asset for

    a) Do the above exchange rates present an arbitrage opportunity? Explain?
    A triangle arbitrage ...

    Solution Summary

    Detailed formula and calculations included for triangle arbitrage opportunity.

    $2.19